Low interest rates are forcing banks to lend more to small businesses
Low interest rates are forcing banks to lend more to consumers and small businesses. The turnaround in the banking sector since the late 1990s when state ownership and corporate ‘tunnelling’ was the norm, has been remarkable. But the recent boom enjoyed by the three big banks—CSOB, owned by KBC (Belgium); Ceska Sporitelna owned by Erste bank (Austria) and Komercni Banka, owned by Societe Generale (France)—is fading, and banks are increasingly re-assessing where profits can be made. The easy money to be earned from the interest rate differentials between deposits and loans is disappearing, following successive central bank rate cuts. “You can’t go much further down,” says Jack Stack, the US chief executive at Ceska Sporitelna.
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